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With the stock market performance being as sluggish as it has been, it’s easy for us to think about not investing at all and keeping all our money in cash. I remember a year ago this time, personal finance bloggers all over the world were blogging about their success in the stock market, encouraging everyone to keep investing and talking about the out performance of the S&P 500 to any other asset class over any 20-year period. These days however, no one really shares their stories anymore.

So what now? The Dow Jones Industrial Average is down roughly 15% this year so do we just stop investing? What about our automatic contributions like 401ks and IRAs?

Since there are only three possible ways to handle this, let’s talk about all of them here:
Staying Steady
These are probably the set it and forget it types. Some of these people might not care too much about their investments, only to find out at a later point in their lives that the majority of their net worth is made up of the investments that they forgot about. They keep investing through the good and bad times, which is exactly what we recommend here at Money Ning. By the way, I kept my 401k contribution rate at 15% this year.

Decreasing the Contribution Rate
Many people fall into this category. They do it because gas has gone up, they do it because their homes have decreased in value, they do it because they want that new car. In reality, they did it because they are emotional and saw the great big fall in the stock market. They saw their investments tank and couldn’t bear anymore pain. Some people usually learn one day that this is not the way to invest, but most will never learn and end up missing the opportunity to create real wealth through investing.

Increasing the Contribution Rate
These are opportunists, and probably someone who don’t need the money in the short term. They like the stock market, and will try to adjust their contributions to take advantage of market declines. Some people that increased the contribution rate might be just doing it because they got a raise. Either way, they have increased their contribution and eventually, they will be better off because they contributed more money than they otherwise would have.

So which approach did you take with this market decline? Which one would you take if you were given the choice again? If the answer to the two questions were different, is there a reason why?

What Did You Do to the Contribution of Your Investments This Year

• Kept It The Same
• Decreased It
• Increased It
• Don't Have Investments

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